Contract For Service: Contract Was Renewed but Company Issued Early Termination One Month after Renewal

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asked on Sep 10, 2020 at 01:48
edited on May 15, 2021 at 21:16
When you are hired under Contract For Service, but is required to work from office, reports to the CEO and get involved in company events just like any other permanent employee, does that gives you similar employment protection as per a Contract Of Service? 

I was given a renewed 1 year contract for service. Came back to work in August for a full month. Come September, my August fee was withheld. I followed up with HR and my boss but was given the run around.

1. On the 4th of September, my boss called me up to the meeting room and within 2 minutes I was told that they have to let me go because they can't afford me. No prior notice, or any discussion took place.

2. My August Fee was still held and was informed they will issue the letter next Monday. I only got the letter on Wednesday and August fee banked in on Tuesday. 

3. In my letter I need to serve 2 months notice and a list of task were asked from me to complete before I can leave. The new contract has only been 1 month so do I even need to serve any notice?

Q1 Is any of this legal because I am termed as a Contractor under Contract for Service? They also made me sign a 30% salary reduction one month after MCO and print the letter as Voluntary Salary reduction. I pointed out that I have a contract and should there be any changes in fee, you need to issue me a written notice and follow the contractual terms you gave. They hinted back with.. sign or resign kinda vibes. 

Q2 If I am an Independent Contractor, they can't force me to come to office. If I have to follow the office employee rules, doesn't that make me an employee, hence the termination is grossly unjustified. 

Q3 The termination comes 1 month after the new contract in effect. Are they allowed to do that and still require me to serve my notice and do their work? 

Q4 I tried to ask for explanation but my direct boss keeps hiding from me. So I ask for immediate release with them giving me in lieu payment. HR, Management either ignores or refuse to entertain. 

I am a solid performer and has never had this happened before. I have a feeling this is more a throw-under-the-bus situation, but how do I initiate any legal action, or can I?

This is a Public Listed Company with seems to be a public toilet level of ethics. 

Hope to get helpful advise from members. 

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2 Answers

answered on Sep 10, 2020 at 10:55
edited May 15, 2021 at 21:28

Everything bores down what is being stated in the Contract you have signed, be it:

(1) Employment Contract
(2) Service Contract

The critical module is the "Termination Clause" stated inside.

For Employees, there should be a D.I. conducted before termination within 24 hours whereas for "contract" service, there isn't.

Post a copy of the "contract" here for discussion, otherwise there is no proper answers.

Take note you are not bound by the company's handbook (if any) but bounded by the Terms and Conditions stated in your service contract. (1) & (2) above have vast differences in legal terminology. 

(1) above is covered by the Employment Laws of Malaysia
(2) above is covered by "Laws of Contract"

There must be proper termination notifications from the company for both (1) & (2) above.
Legal recourse for (1) is via Labor Department or Industrial Relations Department.
Legal recourse for (2) is via a Civil Court Lawsuit.

Do consult a Lawyer for latest legal advises for Industrial Disputes.

(Caveat : The above comment is written by a Q&A registered User. It represents a personal point of view and is in no way associated with others in this forum nor be regarded as legal advice)
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answered on Sep 10, 2020 at 14:46
edited May 15, 2021 at 21:31

@Jeff005, thank you for replying. I attached the extract of the contract and termination. 

I just realised that the termination letter takes effect 1st September 2020. No mention of 2 months serve notice and the letter was backdated to 1st September. I was informed verbally on 4th September and still work yesterday as well.
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